Advisor backs Burkle nominees in Barnes & Noble proxy fight

September 19, 2010

New York City Proxy-advisory firm Institutional Shareholders Services (ISS) said it has recommended that Barnes & Noble shareholders select board directors nominated by billionaire investor Ronald Burkle as part of his proxy fight against the retailer, according to a Monday report by the Wall Street Journal.

Among the nominees recommended by ISS include Burkle himself, as well as Stephen Bollenbach, chairman of KB Homes and former CEO of Hilton Hotels Corp., and Michael McQuary, CEO of Wheego Electric Cars and former president of Earthlink.

Burkle and company are battling Barnes & Noble founder and largest shareholder Leonard Riggio, who is also up for re-election on the board and wasn't recommended by ISS.

The recommendation by ISS is a blow to Barnes & Noble’s efforts to stave off Burkle. With votes dividing between Burkle or Riggio camps, the deciding vote is expected to come from institutional shareholders and index funds. That means the recommendation by ISS, the largest and most influential proxy advisory firm that has institutional investors as its client, could play a key role in determining the outcome of the Barnes & Noble proxy fight, according to WSJ.

As part of his battle, Burkle is petitioning shareholders to amend the company's "poison pill" antitakeover provision, which has prevented him from upping his ownership stake. ISS recommended that the threshold to trigger the poison pill be raised from 20% to 30%.

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